What is an ESOP and is it right for my business?

An Employee Stock Ownership Plan (ESOP) is a qualified retirement plan in which a trust purchases some or all of a business’s ownership on behalf of the company’s employees. ESOPs offer significant tax advantages for selling business owners — in some cases, owners of C corporations can defer or eliminate capital gains taxes on the sale entirely. Employees benefit from ownership stakes that grow with the business. ESOPs are best suited for profitable businesses with a stable, engaged workforce, where the owner values the legacy of keeping the business independent and rewarding employees. Yeo & Yeo provides ESOP feasibility analysis and advisory services to help business owners evaluate whether an ESOP is the right transition vehicle for their situation.